UH cuts its sports losses again

Frazier says some reduction of the $4.6 million debt is near

Although the University of Hawaii athletic department operated at a deficit for another year, the school's sports program continued its push toward profitability, reporting reduced losses for a second straight year.

UH athletic director Herman Frazier told the UH Board of Regents yesterday that the department ran a deficit of about $93,000 in the 2004-05 fiscal year, an improvement over the previous year's $545,000 loss.

A draft of the department audit for 2004-05 was presented to the Board of Regents during its meeting yesterday at Honolulu Community College. The draft was accepted by the regents with minor changes that didn't impact the final numbers for the fiscal year that ended June 30, 2005.

"Overall, I was pleased with what happened in the department. They're not out of the woods yet financially, but certainly you can see the trends are favorable," said Jim Hasselman of PricewaterhouseCoopers, the firm that performed the audit.

According to the audit, the athletic department generated $14.8 million in revenue and spent close to $20.8 million. Much of the difference was covered by $5.8 million in "nonoperating revenues," which included private gifts totaling $3.3 million.

Frazier credited the department's fundraising efforts through Koa Anuenue for aiding its progress, and pointed out that the department received about $5 million in private gifts over the last two years.

"For the most part, they have really been our bank," Frazier told the board. "They have been the ones to step up and support us when we somehow get to downfalls."

The department's cumulative debt grew to $4.6 million, and a $1 million loan from the university still remains. Frazier said the department will work with UH-Manoa chancellor Denise Konan on working down the loan.

"We will sit down with her and there will be reduction of that this year," Frazier said.

Football remains the department's biggest revenue-generating program with a total of $4.3 million. Men's basketball ($748,468), women's volleyball ($912,005) and men's volleyball ($233,114) also made money in 2005.

"There might have been a game back in football where if you have 2,000 more people come, then all of a sudden you've closed that gap," Frazier said. "So we're in a fluid business and you just have to keep dealing with it."

Following losses totaling close to $2.5 million in the 2002-03 fiscal year, the department implemented a five-year plan designed to stabilize the athletic program's financial standing and hired a new fiscal officer to better track the flow of funds.

The losses dropped significantly in the first year of the plan and again last year. Now the department is working toward a seemingly modest yet significant goal for the current fiscal year that ends in June -- one dollar.

"If I make a dollar that means we're working and then we'll start working on taking the cumulative deficit down," Frazier said.

With the winter season winding down and most of the spring sports season left to play, Frazier told the board the department will be close to the schedule under the plan in 2006.

"We'll be pretty close to what's in the five-year plan, so we should be either zero or plus," he said.

"It becomes a juggling game and it depends on Ws and Ls, but that's the nature of our business and that's what we bought into and we just have to deal with it," he said.

He said projected revenue from the football program was reduced from $4.6 million to $4 million after the team's struggles at the gate last season.

Frazier told the board he is still deciding whether to add another home football game on Sept. 9 or go on the road for a guarantee. UH will receive a guarantee of $650,000 for the Warriors' game at Alabama this fall.

The 2004-05 audit does not include a new three-year television contract with KHNL/KFVE that at $1.75 million per year more than doubled its previous pact. The contract went into effect last year and will be factored into the 2006 figures.